Understand a complete set of financial statements.
A complete set of financial statements comprises:
● A Statement of Financial Position (Balance Sheet)
● A Statement of Profit or Loss (Income Statement) and other Comprehensive
Income (Statement of Comprehensive Income)
● A Statement of Changes in Equity
● A Statement of Cash Flows
● Notes, comprising a summary of significant accounting policies and other
explanatory information
Explain the general features of financial statements.
General features of Financial Statements
As per NZ IAS 1, the following considerations must be followed in the presentation of a
financial report:
Fair presentation and A set of financial Applying IFRSs (with
compliance with IFRSs statements are required to additional disclosures
present fairly an entity’s where necessary) is
financial performance, presumed to result in a fair
financial position and cash presentation
flows.
NZ IAS 1 para 15 - 19
Going concern There is an assumption Exception applies where
that all entities adopt the management intends to
going concern basis of liquidate or cease trading
accounting - an entity
should be operating for a NZ IAS 1 Para 25 - 26
foreseeable future.
Accrual basis of Except for cash flow
accounting information, the financial
statements are required to
be presented using the
accruals basis of
accounting. E.g.,
recognised income as
“earned” and not received.
NZ IAS Para 27 - 28
1
, Materiality and aggregation Each material class of Items of a dissimilar nature
similar items must be or function must be
presented separately. presented separately
unless they are immaterial
Eg in a warehouse, you
would want to aggregate NZ IAS 1 Para 29 - 31
all those inventories into
categories instead of doing
it individually.
Offsetting Assets & liabilities and Offsetting detracts from the
income & expenses are not ability of the users to
to be offset, unless understand the entity’s
required or permitted by transactions.
another accounting
standard NZ IAS 1 Para 32 - 35
Frequency of reporting An entity shall present a
complete set of financial
statements at least
annually.
NZ IAS 1 para 36
Comparative information Comparative information
for the immediately
preceding reporting period
must be disclosed for all
amounts in all four
statements and related
notes.
NZ IAS para 38
Consistency of Financial information must
presentation be consistently presented
from one period to the next
unless:
● There has been a
significant change in
the entity’s
operations
● A change in
presentation or
classification will
provide more
2
A complete set of financial statements comprises:
● A Statement of Financial Position (Balance Sheet)
● A Statement of Profit or Loss (Income Statement) and other Comprehensive
Income (Statement of Comprehensive Income)
● A Statement of Changes in Equity
● A Statement of Cash Flows
● Notes, comprising a summary of significant accounting policies and other
explanatory information
Explain the general features of financial statements.
General features of Financial Statements
As per NZ IAS 1, the following considerations must be followed in the presentation of a
financial report:
Fair presentation and A set of financial Applying IFRSs (with
compliance with IFRSs statements are required to additional disclosures
present fairly an entity’s where necessary) is
financial performance, presumed to result in a fair
financial position and cash presentation
flows.
NZ IAS 1 para 15 - 19
Going concern There is an assumption Exception applies where
that all entities adopt the management intends to
going concern basis of liquidate or cease trading
accounting - an entity
should be operating for a NZ IAS 1 Para 25 - 26
foreseeable future.
Accrual basis of Except for cash flow
accounting information, the financial
statements are required to
be presented using the
accruals basis of
accounting. E.g.,
recognised income as
“earned” and not received.
NZ IAS Para 27 - 28
1
, Materiality and aggregation Each material class of Items of a dissimilar nature
similar items must be or function must be
presented separately. presented separately
unless they are immaterial
Eg in a warehouse, you
would want to aggregate NZ IAS 1 Para 29 - 31
all those inventories into
categories instead of doing
it individually.
Offsetting Assets & liabilities and Offsetting detracts from the
income & expenses are not ability of the users to
to be offset, unless understand the entity’s
required or permitted by transactions.
another accounting
standard NZ IAS 1 Para 32 - 35
Frequency of reporting An entity shall present a
complete set of financial
statements at least
annually.
NZ IAS 1 para 36
Comparative information Comparative information
for the immediately
preceding reporting period
must be disclosed for all
amounts in all four
statements and related
notes.
NZ IAS para 38
Consistency of Financial information must
presentation be consistently presented
from one period to the next
unless:
● There has been a
significant change in
the entity’s
operations
● A change in
presentation or
classification will
provide more
2
